Emergency funding to address the COVID-19 pandemic caused the largest increase in federal grants to states since 2009 when Congress approved the American Recovery and Reinvestment Act (ARRA). In fiscal year 2020, pandemic-related spending made up the largest share of federal grants in eight states, and was the second-largest in the rest. COVID-19 assistance, which states spent to meet a diverse set of urgent needs such as coronavirus testing and housing and food assistance, was in addition to the federal grants states normally receive, which typically make up about a third of state revenue and help pay for education, transportation, public safety, social services, environmental protection, and other programs. Before the pandemic, total federal grants had been slowly but steadily rising for years, mostly because of Medicaid, the federal and state health insurance program for people from low-income households and people with disabilities, and other health spending.

Wildfires in the United States have become more catastrophic and expensive in recent years, with the U.S. Department of the Interior and the U.S. Forest Service nearly doubling their combined spending on wildfire management in the last decade. Wildfire management consists of preparing for, fighting, recovering from, and reducing the risk of fires. To execute these activities, states, localities, the federal government, and Tribes, as well as nongovernment entities such as nonprofit organizations and private property owners, participate in a complex system of responsibilities and funding dictated by land ownership and an interconnected set of cooperative agreements.